As the COVID-19 outbreak progressed, the public eye focused in part on corporate actions: How were corporations responding to the weak economy? How were they treating employees who could no longer work in-person? Were they doing anything to help in the fight against the virus?
Not only have news stories and social media posts concentrated on corporate actions, but there are many people actively keeping track of what companies have done – the good and the bad. In fact, Litigation Insights’ recent national survey of jury eligibles1 discovered that roughly 43% report they are keeping track of companies’ positive and negative actions and plan to change their spending accordingly. Clearly, companies’ actions since the start of the pandemic have impacted, or will impact, potential jurors’ attitudes.
Part 1 of this blog series discussed how positive corporate actions can boost your “good company” story defense, while actions perceived as heartless or greedy can undercut your efforts. But what corporate actions count? What matters most to jurors as they consider a corporate defendant in trial? And what individual factors tend to influence a juror’s opinions of corporate actions?
This blog continues our examination of our recent corporate attitudes survey, in an effort to address such questions.
Jurors’ Views on Corporate Actions
With unemployment skyrocketing and many families facing economic hardships, we wanted to explore how strongly jurors felt about various corporate actions. Does helping with the COVID response create goodwill? What do jurors think about increased prices on important or scarce goods? Do jurors expect CEOs to give up their pay to keep employees? And are jurors understanding of furloughs and layoffs, or do they hold it against companies and corporate executives?
First, jurors gave companies credit for helping to make products relevant to the fight against COVID-19. Forty-seven percent of jurors agreed, and another 24% strongly agreed, that companies that have started to manufacture products they did not previously make to help fight COVID-19 (e.g., masks, respirators, hand sanitizer) have gone above and beyond in their duty to the public.
Second, the economic impact of the virus has resulted in significant price changes. These include both welcomed price drops, like gas, and unpopular price hikes, like food.2 Most jurors criticized the price hikes of essential items, like meat and eggs, believing that the cost of such items should not increase despite shortages. Indeed, 56.3% of jurors disagreed that “companies raising prices on goods the public needs right now isn’t wrong – it’s how supply and demand economics work.”
Third, an overwhelming majority of jurors (76%) agreed CEOs who gave up their compensation to ensure they could continue to pay workers and stay in business deserved praise. Companies that didn’t take this action, meanwhile, may face some negativity, because jurors seemed to hold this expectation. In fact, 68% of our sample agreed that “all corporate CEOs should be giving up their paychecks to ensure the company can keep paying the ‘little guy employee’ through the stay-at-home conditions due to COVID-19.”
Of course, not all companies were able to keep everybody on, and jurors had mixed feelings about these layoffs and furloughs. On a company level, jurors thought many corporations exhibited business savvy to keep the doors open after the COVID situation is over, even if that meant laying off workers in the meantime. Thirty-eight percent of jurors agreed, and another 12% strongly agreed, that corporations who are laying off workers are being smart – that is what will keep their company alive until COVID-19 is over and rehiring begins.
And yet, jurors were less forgiving when asked about high-paid corporate executives, with the majority believing these layoffs exemplified corporate executives’ greed. Thirty-six percent of jurors agreed, and another 18% strongly agreed, that layoffs and furloughs of employees during a pandemic is a prime example of corporate executives being greedy and putting themselves first.
How do we reconcile these seemingly contradictory views of layoffs – that jurors understand a business’ need for them, while also believing they exemplify corporate executives’ greed? We examined individual factors to investigate this discrepancy, such as political leaning, social leanings, fiscal leanings, and locus of control, among others. In doing so, we discovered a pair of factors that may have influenced this dichotomy:
Attitude Influencers: Financial Views
Beyond asking about jurors’ political party affiliation, our survey asked about their financial and social views.3 And, our results showed that a juror’s financial conservatism or liberalism was the strongest and most meaningful factor in his or her evaluation of corporate actions.
The chart below shows how jurors of different financial leanings assessed the statement that laying off workers is a smart business decision. Financial conservatives reported the most agreement with corporate layoffs, and financial liberals were most against the statement.
When it came to corporate executive greed, financial conservatives and liberals again demonstrated statistically significant deviations in their views. As shown below, financial liberals agreed most that layoffs and furloughs were a sign of greed by corporate executives, while the moderates and conservatives disagreed.
Some good news, however, is that jurors’ financial viewpoints were less impactful when it came to how they evaluated corporations that stepped up to help with COVID efforts. It appears that regardless of financial views, most jurors were willing to praise corporations who have helped the community with this crisis.
Attitude Influencers: Who Controls Your Destiny?
Another key factor that affects how jurors evaluate a case is what is known in psychology as ‘locus of control’ – that is, the perspective one takes regarding the cause of events that happen in life. People with an external locus of control tend to believe that what happens in life is outside of their control (e.g., due to luck, the whims of “the system”). In contrast, people with an internal locus of control believe they have control over outcomes in life (e.g., work ethic).
Typically, jurors with an external locus of control take the plaintiff perspective more easily, because they believe that factors outside of one’s control influence outcomes. Conversely, jurors with an internal locus of control are more like to be defense jurors, as they focus more on personal responsibility and believe that outcomes are caused by what an individual did or didn’t do.
For example, below are two juror social media posts that embody these differing perspectives:
In line with this trend, our survey results showed that an external locus of control was related to an increased focus on and heightened expectation of corporate actions during the pandemic. Specifically, people with an external locus of control were significantly more likely to keep track of the actions of companies and plan to change their spending accordingly. Likewise, they expected companies to do more; that is, people with an external locus of control more strongly believed that layoffs and furloughs are examples of executive greed,4 that CEOs giving up their pay is just a “PR stunt,”5 and that companies “don’t deserve any kudos” for shifting manufacturing to medical supplies because they are receiving government grants for doing so.6
Such jurors are likely to carry these attitudes and criticisms into the courtroom, throughout the pandemic and for some time after.
Results from our survey show that many jurors are aware of actions taken by corporations during the pandemic, and a variety of these actions influence jurors’ attitudes toward corporations – for better or for worse. These include helping in the fight against COVID-19, CEOs giving up their pay to keep employees, raising prices on goods that the public needs, and conducting layoffs and furloughs due to the economic impact of the virus.
A corporate defendant who performed community- or employee-helpful acts during the COVID-19 outbreak can certainly use these actions to bolster its “good company” story in trial. But juror differences can still shape how they view such actions. Our analyses revealed that those who identify as financially liberal, as well as those with an external locus of control, are likely more critical of corporate actions. Consequently, it can be important to think through what actions your company took during the pandemic – and who you want on your jury – when considering your “good company” story defense.
By: Katrina Cook, Ph.D. – Consultant & Nick Polavin, Ph.D. – Consultant
1 This survey was completed by a total of 185 respondents.
2 Burns, D. (2020, April 10). How COVID-19 Affected U.S. Consumer Prices in March. https://www.reuters.com/article/us-health-coronavirus-usa-prices/how-covid-19-affected-us-consumer-prices-in-march-idUSKCN21S20H
3 Jurors were asked: “On social issues, do you consider yourself to be liberal, moderate, conservative, or other?” and “On financial issues, do you consider yourself to be liberal, moderate, conservative, or other?”
4 r = .464, p < .001
5 r = .381, p < .001
6 r = .304, p < .001